Crypto security guide: how not to lose your money when using cryptocurrency.

by Gabriel Cross Crypto Journalist
As the popularity of cryptocurrencies grows, so does the activity of cybercriminals, who try to steal cryptocurrency from holders by any means possible: doing phishing attacks, finding vulnerabilities in the source code or posing as employees of companies to get private information, such as private keys, passwords, seed phrases, etc. Therefore, the problem of security when using cryptocurrencies is particularly acute.

Creating and Protecting a Crypto Wallet

First, you need to create a cryptocurrency wallet - it will be your personal safe, which only you can access. Therefore, responsibility for safety of funds lies entirely on its owner: non-custodial wallets store private keys only on user's device, and neither developers nor company will help to restore access if you lose private keys and seed-phrase.

The creation process may differ depending on the client used. Some wallets require you to save the seed phrase immediately and set additional security measures: 2FA, PIN, or password. Other clients allow you to do this later to simplify and speed up the wallet creation process. From my bitsgap experience I would advise to have separate crypto wallets for trading bots if you use them. This especially applies to little-known bots that you haven't used before. To avoid scam and loss of all funds I always do that and replenish my wallet with small amount first.

What is a seed phrase

A Seed-phrase is a sequence of 12 or 24 pseudo-random words generated by the wallet. It is also called a recovery phrase, a secret phrase, a mnemonic password, or just a seed. There are other sequences, and some wallets allow you to customize the sequence yourself. The Seed phrase stores the information you need to recover your wallet in case you forget your password or lose access to your device, where the wallet is installed.

More modern clients and devices, such as the Trezor T hardware wallet, allow you to extend your mnemonic password with a passphrase, which is an additional custom word that the user sets himself. This allows you to create an unlimited number of hidden addresses for more secure storage of cryptocurrencies. This method is suitable for those who plan to store cryptocurrency for one or more years.

How to store the seed phrase and other confidential information

The first rule is not to store the mnemonic password digitally, for example as a screenshot or text on a device or in the cloud. The same applies to flash drives. Hackers can intercept traffic and access your device or account. The safest way to store is on offline storage. Anything you can write or type words on will do:

  • Paper;
  • A laminated card;
  • A special cid storage device.

And one more key rule, which every crypto-holder should memorize as a mantra: never give the seed phrase to anyone! No matter how much they ask you to. Scammers pretend to be tech support employees or use other methods of manipulation.

Public and private keys

When you log into a cryptocurrency wallet, it displays a long sequence of numbers and letters. This is a public or public key. It only encrypts the address of your wallet to which other users or yourself will send coins. It can be shared and given to unauthorized people, since it does not contain any confidential information that gives access to your funds. With a public key, other users can verify your signature to make sure that the address belongs to you.Do not confuse a private key with a mnemonic password. A private key looks like a public key, but most often holders use a seed phrase and open wallets with a PIN, password, Touch ID or Face ID (when using mobile wallets). 


Be careful and don't trust anyone in the crypto-environment, if someone writes to you in personal messages asking to give him the seed phrase or any other private information that gives you access to your wallet. Only scammers do that. Technical support will never write to you directly. If you need any help, write only to the general chat. Admins and moderators will come to your aid.

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About Gabriel Cross Junior   Crypto Journalist

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Joined APSense since, July 22nd, 2022, From New York, United States.

Created on Jul 22nd 2022 04:04. Viewed 189 times.


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